If you are a current ISA participant thinking about ways to improve compliance, now might be a good time to consider the Importer Self-Assessment Product Safety Pilot. In addition to receiving time on the agenda at the U.S. Customs and Border Protection Trade Symposium October 29 – 31, CBP announced in the Federal Register that they would begin a trial program to expand the Importer Self-Assessment Program to include product safety. The trial is designed to encourage companies to maintain a high-level of compliance with product safety laws and standards.
The ISA-Product Safety pilot will be conducted by CBP, CPSC and volunteer importers. Existing ISA members can apply for the product safety program and the two agencies will select a limited number of the applicants to participate. In order to participate in ISA–PS, an importer must:
· Be an active member in ISA and comply with all ISA requirements and obligations.
· Complete an ISA–PS/CPSC Questionnaire and sign an ISA–PS/CPSC Addendum.
· Agree to comply with all laws and regulations administered by CBP, as well as the CPSC
· Maintain an internal control system that ensures the integrity of product safety.
· Notify CBP of any major organizational changes that may affect the importer’s product safety controls.
· Submit an annual written notification to CBP that sets forth the importer’s ISA–PS point of contact and acknowledges that the importer continues to meet the requirements of ISA–PS.
Companies selected for the pilot program will be expected to follow a set of best practices compiled by the government. Through domestic site visits, CBP and the CPSC will verify that companies have adequate procedures and processes in place to ensure product safety throughout the supply chain.
As an incentive, the CPSC will offer increased benefits to companies that join the program. Some of these benefits include:
· Assigning a product-specific point of contact that can assist in providing product codes of recalled products for inclusion on customs entries.
· Training on product safety compliance, internal controls and agency audit procedures.
· Allowing companies to extend ISA coverage to multiple business units.
· Fewer product safety tests on goods.
· Granting "front of the line" privileges at CPSC laboratories to ISA-PS participants when product safety testing is necessary.
· Allowing products to be destroyed instead of requesting redelivery of faulty goods to CBP.
· Automatic enrollment in CPSC's Fast-Track Product Safety Recall Program.
The pilot program will be reviewed after two years to determine whether it should become permanent.
Friday, October 31, 2008
Thursday, October 23, 2008
CBP Issues Frequently Asked Questions on AES Filings
U.S. Customs and Border Protection (CBP) has published two documents containing answers to frequently asked questions about AES. The first document contains general questions and answers about AES such as costs and hardware and software requirements. The second document contains specific process-oriented questions, and is designed to assist the trade community in understanding the expectations of CBP concerning the advance electronic cargo information rules for export shipments.
Click on the following links to review each FAQ.
General FAQ
Specific FTR FAQ
Click on the following links to review each FAQ.
General FAQ
Specific FTR FAQ
USITC Introduces HTS Online Reference Tool
The U.S. International Trade Commission (USITC) introduced the development of the new HTS Online Reference Tool. Managed by the USITC, the new tool will be a single source of information for importers, brokers, carriers and the government.
The HTS Online Reference Tool will provide:
• Complete legal text and notes;
• The most current U.S. tariff rates;
• Interactive access and searches;
• Direct links to classification rulings;
• Quick searches by word, word combinations or HTS number;
• Direct links to footnotes;
The system will provide access to the most current rulings. Users will be able to jump directly from a specific HTS item to the Customs Ruling Online Search System (CROSS) for determinations on product classification for that HTS item.
The tool also provides thesaurus capability and the ability to use synonyms, such as “doll” instead of “toys”. Using XML software, the ITC will be able to quickly update the HTS for changes such as Free Trade Agreements and duty rate reductions.
Look for this fantastic new tool in the first quarter of 2009.
The HTS Online Reference Tool will provide:
• Complete legal text and notes;
• The most current U.S. tariff rates;
• Interactive access and searches;
• Direct links to classification rulings;
• Quick searches by word, word combinations or HTS number;
• Direct links to footnotes;
The system will provide access to the most current rulings. Users will be able to jump directly from a specific HTS item to the Customs Ruling Online Search System (CROSS) for determinations on product classification for that HTS item.
The tool also provides thesaurus capability and the ability to use synonyms, such as “doll” instead of “toys”. Using XML software, the ITC will be able to quickly update the HTS for changes such as Free Trade Agreements and duty rate reductions.
Look for this fantastic new tool in the first quarter of 2009.
ATPA and GSP Extended
On October 16, 2008, President Bush signed H.R. 7222 which extends benefits under the Generalized System of Preferences (GSP) for one year until December 31, 2009. The Andean Trade Preferences Act (ATPA) was extended to December 31, 2009 for Columbia and Peru and to June 30, 2009 for Bolivia and Ecuador.
Wednesday, October 8, 2008
Preliminary Answers for the Oct. 2008 Exam
As many people sit on pins and needles waiting to see the answers posted for the most recent Customs Broker’s Exam, our very own Wizard has taken the exam and provided a list of possible answers and related regulations where the answers were found.
We invite you to post your answers, explanations, arguments and other comments. Obviously, Boskage Commerce Publications cannot guarantee the accuracy of these answers since CBP has the one and only answer key, but the Wizard has an excellent record of achieving a score of better than 90%.
Click HERE to view a copy of the Wizard’s answers for the October 2008 Exam!
Additional commentary on the exam will be available to our students soon.
We invite you to post your answers, explanations, arguments and other comments. Obviously, Boskage Commerce Publications cannot guarantee the accuracy of these answers since CBP has the one and only answer key, but the Wizard has an excellent record of achieving a score of better than 90%.
Click HERE to view a copy of the Wizard’s answers for the October 2008 Exam!
Additional commentary on the exam will be available to our students soon.
Exam Answers Coming Today
Keep refreshing, the Wizard will have answers today, along with possible protests by the end of the day!
Friday, October 3, 2008
Customs Broker Exam Study Tip 12: CBP Directives
For many years, the Customs Brokers Exam only required the use of the HTSUS and the CBP Regulations; however, in 2004, CBP expanded its scope of materials to include Customs Directives and other reference materials. These materials are important because they provide guidance on activities that brokers perform that aren’t included in the regulations. Since their inclusion, these resources have comprised 7.5% of the total questions on the exam. Because of the number of resources, it’s difficult to predict specific areas for testing. The best thing to do is to study all of it. We’ve provided the key highlights for the four most frequently tested supplemental resources.
1. Instructions for Preparation of CBP Form 7501
Although most entry summaries are completed electronically, it’s important to have a good understanding of the information contained on this document. By reading these instructions, you could complete a CBP 7501 by hand without the assistance of a computer. You should keep this document handy and review all blocks because it has been one of the most frequently tested supplemental resources since the implementation of the new CBP 7501 format in September 2005. Become very familiar with each block number, so you can easily reference it. Block 2 (Entry Type Code) and Block 31 (Net Quantity) are easy targets!
2. CD 3510-004 - Monetary Guidelines for Setting Bond Amounts
The purpose of the bond is to protect the revenue and ensure compliance. The amount of a bond is calculated using information on the bond application, the criteria in Part 113 of the CBP Regulations and the guidelines in this directive. This directive provides standardized guidelines for computed the bond amounts for all types of bonds. For the exam, it’s important to know how to calculate single entry and continuous bonds.
The first type of bond is the Activity 1, Importer or Broker Continuous Bond. The minimum amount of a bond in this category is $50,000.
For importers paying zero to $1,000,000 in duties and taxes, the bond should be computed as 10% of the duties and taxes paid for the previous calendar year and issued in increments of $10,000.
For importers paying over $1,000,000 in duties and taxes, the bond should be computed as 10% of the duties and taxes paid for the previous calendar year and issued in $100,000 increments.
The next type of bond is the Activity 1, Importer or Broker Single Transaction Bond. This bond is valid for one shipment and is computed in an amount not less than the total entered value of the merchandise plus all duties, taxes and fees unless the merchandise is subject to other government agency requirements such as the FDA, and all merchandise subject to quota and/or visa requirements. In these situations, the bond will be computed in an amount of at least three times the total entered value of the shipment. In addition, the district director may set the single transaction bond amount at 10 percent of the total entered value for unconditionally free merchandise, which is not subject to the previously mentioned categories.
3. CD 3550-055 - Instructions for Deriving Manufacturer/Shipper Identification
Questions involving the Manufacturer’s ID code should be some of the easiest to answer. Not only does this directive provide instructions on how to construct the code, but the information is also included in the CBP Form 7501 Instructions. Just memorize the rules for deriving the Manufacturer's ID number.
This code is commonly referred to as the MID or Manufacturer Identification Code. This technique is also known as keylining. On the broker’s exam from October 2005, a question required knowledge of the term keylining.
Customs requires the formation of a code from the name and address of the manufacturer.
The MID contains five components that are added together without spaces to create the code. The code can be up to 15 characters in length. The five components consist of the following information:
· Two letter abbreviation for the country of origin
· First three letters of the first name of the manufacturer
· First three letters of the second name of the manufacturer
· First four digits of the street address, and
· First three letters of the city name.
There are some general rules to consider.
· Ignore all punctuation
· Ignore single character initials. and
· Ignore the words “a”, “an”, “and’, “of”, and “the”.
4. 3550-067 - Entry Summary Acceptance and Rejection
Customs Directive 3550-067 provides guidelines for uniform acceptance and rejection of entry summaries. Five major areas of interest in this directive include the following:
· Collections Processing – Rejections
· Acceptance Review and Summary Processing
· Processing of Rejected Entry Summaries
· Time Limit
· Rejection Effect on Entry Summary Filing Time
This information is a little more complicated to grasp, so read each of the major areas and highlight key information.
Although we didn’t cover all of the directives and supplemental materials, they are not any less important. Remember the advice from the beginning of the article - the best thing to do is to study all of it.
We welcome your comments on these suggestions and encourage you to add your own ideas to this forum so that other students studying for the exam can benefit from your experiences. Check the Boskage Trade News regularly for other useful news for international trade professionals! As soon as the Wizard obtains a copy of the test and has time to work out some preliminary answers, we’ll post them here for you to review and comment on!
1. Instructions for Preparation of CBP Form 7501
Although most entry summaries are completed electronically, it’s important to have a good understanding of the information contained on this document. By reading these instructions, you could complete a CBP 7501 by hand without the assistance of a computer. You should keep this document handy and review all blocks because it has been one of the most frequently tested supplemental resources since the implementation of the new CBP 7501 format in September 2005. Become very familiar with each block number, so you can easily reference it. Block 2 (Entry Type Code) and Block 31 (Net Quantity) are easy targets!
2. CD 3510-004 - Monetary Guidelines for Setting Bond Amounts
The purpose of the bond is to protect the revenue and ensure compliance. The amount of a bond is calculated using information on the bond application, the criteria in Part 113 of the CBP Regulations and the guidelines in this directive. This directive provides standardized guidelines for computed the bond amounts for all types of bonds. For the exam, it’s important to know how to calculate single entry and continuous bonds.
The first type of bond is the Activity 1, Importer or Broker Continuous Bond. The minimum amount of a bond in this category is $50,000.
For importers paying zero to $1,000,000 in duties and taxes, the bond should be computed as 10% of the duties and taxes paid for the previous calendar year and issued in increments of $10,000.
For importers paying over $1,000,000 in duties and taxes, the bond should be computed as 10% of the duties and taxes paid for the previous calendar year and issued in $100,000 increments.
The next type of bond is the Activity 1, Importer or Broker Single Transaction Bond. This bond is valid for one shipment and is computed in an amount not less than the total entered value of the merchandise plus all duties, taxes and fees unless the merchandise is subject to other government agency requirements such as the FDA, and all merchandise subject to quota and/or visa requirements. In these situations, the bond will be computed in an amount of at least three times the total entered value of the shipment. In addition, the district director may set the single transaction bond amount at 10 percent of the total entered value for unconditionally free merchandise, which is not subject to the previously mentioned categories.
3. CD 3550-055 - Instructions for Deriving Manufacturer/Shipper Identification
Questions involving the Manufacturer’s ID code should be some of the easiest to answer. Not only does this directive provide instructions on how to construct the code, but the information is also included in the CBP Form 7501 Instructions. Just memorize the rules for deriving the Manufacturer's ID number.
This code is commonly referred to as the MID or Manufacturer Identification Code. This technique is also known as keylining. On the broker’s exam from October 2005, a question required knowledge of the term keylining.
Customs requires the formation of a code from the name and address of the manufacturer.
The MID contains five components that are added together without spaces to create the code. The code can be up to 15 characters in length. The five components consist of the following information:
· Two letter abbreviation for the country of origin
· First three letters of the first name of the manufacturer
· First three letters of the second name of the manufacturer
· First four digits of the street address, and
· First three letters of the city name.
There are some general rules to consider.
· Ignore all punctuation
· Ignore single character initials. and
· Ignore the words “a”, “an”, “and’, “of”, and “the”.
4. 3550-067 - Entry Summary Acceptance and Rejection
Customs Directive 3550-067 provides guidelines for uniform acceptance and rejection of entry summaries. Five major areas of interest in this directive include the following:
· Collections Processing – Rejections
· Acceptance Review and Summary Processing
· Processing of Rejected Entry Summaries
· Time Limit
· Rejection Effect on Entry Summary Filing Time
This information is a little more complicated to grasp, so read each of the major areas and highlight key information.
Although we didn’t cover all of the directives and supplemental materials, they are not any less important. Remember the advice from the beginning of the article - the best thing to do is to study all of it.
We welcome your comments on these suggestions and encourage you to add your own ideas to this forum so that other students studying for the exam can benefit from your experiences. Check the Boskage Trade News regularly for other useful news for international trade professionals! As soon as the Wizard obtains a copy of the test and has time to work out some preliminary answers, we’ll post them here for you to review and comment on!
Wednesday, October 1, 2008
Customs Broker Exam Study Tip 11: Free Trade Agreements
With the increase of free trade agreements between the U.S. and other countries, the number of questions on the CBE related to these agreements has increased. In fact, “Trade Agreements” often has its very own section of questions on the exam. Free Trade Agreements (FTA's) are international agreements made between two or more nations that relate to common trade or service issues. FTA’s reduce or eliminate all tariffs and other restrictions on substantially all the trade in goods between its member countries based on country of origin.
The information needed to answer questions about FTA’s is likely to be found in one of three places: (1) the General Notes of the HTSUS, (2) Chapters 98 an 99 of the HTSUS and (3) 19 CFR Part 10. Memorize the titles of these General Notes and skim the text to become familiar with the topics covered in each. In your review of the programs, concentrate on the basic requirements such as tariff shift, de minimis and RVC requirements. Each program has different requirements regarding allowance of the special duty treatment, and some of these programs are subject to change. Most of these programs have very detailed requirements that must be met in order to claim the duty-free status. Additionally, these programs are often difficult to understand and some have limited use in daily practice. Try not to be too overwhelmed when encountering these problems. If they appear too difficult, move and come back to them later.
Don’t overlook important terminology. Be sure to know the definitions for each of the following:
· Accumulation
· Direct Cost of Processing
· De Minimis
· Imported Directly
· Transshipment
· Regional Value Content RVC
· Tariff Shift
· Substantial Transformation
To view a list of the FTAs, the references to the HTSUS General Notes, SPI and CFR references, click HERE.
We welcome your comments on these suggestions and encourage you to add your own ideas to this forum so that other students studying for the exam can benefit from your experiences. Check the Boskage Trade News regularly for more helpful hints on studying for the Customs Broker Exam and other useful news for international trade professionals!
The information needed to answer questions about FTA’s is likely to be found in one of three places: (1) the General Notes of the HTSUS, (2) Chapters 98 an 99 of the HTSUS and (3) 19 CFR Part 10. Memorize the titles of these General Notes and skim the text to become familiar with the topics covered in each. In your review of the programs, concentrate on the basic requirements such as tariff shift, de minimis and RVC requirements. Each program has different requirements regarding allowance of the special duty treatment, and some of these programs are subject to change. Most of these programs have very detailed requirements that must be met in order to claim the duty-free status. Additionally, these programs are often difficult to understand and some have limited use in daily practice. Try not to be too overwhelmed when encountering these problems. If they appear too difficult, move and come back to them later.
Don’t overlook important terminology. Be sure to know the definitions for each of the following:
· Accumulation
· Direct Cost of Processing
· De Minimis
· Imported Directly
· Transshipment
· Regional Value Content RVC
· Tariff Shift
· Substantial Transformation
To view a list of the FTAs, the references to the HTSUS General Notes, SPI and CFR references, click HERE.
We welcome your comments on these suggestions and encourage you to add your own ideas to this forum so that other students studying for the exam can benefit from your experiences. Check the Boskage Trade News regularly for more helpful hints on studying for the Customs Broker Exam and other useful news for international trade professionals!
Grace Period for AES Filing Ends September 30
Although the final rule for filing export information by AES became effective on July 2, 2008, the trade was allowed a 90-day grace period to fully implement the process. The grace period for mandatory Automated Export System (AES) implementation ends September 30, 2008. Beginning October 1, exporters will be required to use AES or AESDirect to report all shipments requiring a Shipper’s Export Declaration (SED).
Some of the highlights of these new regulations include the following.
• Elimination of the ability to submit the Shipper’s Export Declaration (Form V-7525) manually; all transactions require electronic reporting.
• More rigorous penalty provisions may be imposed per violation from $1,100 to $10,000 both civil and criminal, for the delayed filing, failure to file, false filing of export information, and/or using the AES to further any illegal activity.
• New filing deadlines by mode of transportation for reporting export information.
Anyone submitting paper after September 30, 2008 will be in violation of the FTR and subject to penalties. It is important for the trade to understand these new requirements to avoid the increased penalties and seizure of shipments. For additional information on the mandatory filing requirements, check the AES website and 73 Fed. Reg. 31548 (June 2, 2008).
Some of the highlights of these new regulations include the following.
• Elimination of the ability to submit the Shipper’s Export Declaration (Form V-7525) manually; all transactions require electronic reporting.
• More rigorous penalty provisions may be imposed per violation from $1,100 to $10,000 both civil and criminal, for the delayed filing, failure to file, false filing of export information, and/or using the AES to further any illegal activity.
• New filing deadlines by mode of transportation for reporting export information.
Anyone submitting paper after September 30, 2008 will be in violation of the FTR and subject to penalties. It is important for the trade to understand these new requirements to avoid the increased penalties and seizure of shipments. For additional information on the mandatory filing requirements, check the AES website and 73 Fed. Reg. 31548 (June 2, 2008).
New: Mandatory SNAP-R Filing
The Bureau of Industry and Security (BIS) issued a final rule requiring all export and reexport license applications, classification requests, encryption review requests, license exception notifications, and related documents be submitted via its automated Simplified Network Application Process (SNAP-R). Exemptions to the rule include Special Comprehensive Licenses (SCL) and certain situations authorized by BIS. Currently, members of the public submit these applications, requests and notifications to BIS in one of three ways: via SNAP–R, via BIS’s Electronic License Application Information Network (ELAIN), or via the paper BIS Multipurpose Application Form BIS 748–P. With the improvements made to SNAP-R, filers have the ability to include documents related to the request in the form of PDF files as “attachments” to the submission. BIS believes that exclusive use of SNAP–R will improve efficiency for all parties by reducing processing times and simplifying compliance with and administration of export controls.
This new rule takes effect for all of the above submissions on October 20, 2008. Additional information on the new filing requirements and criteria under which BIS will authorize paper submission can be found in the Federal Register, August 21, 2008.
This new rule takes effect for all of the above submissions on October 20, 2008. Additional information on the new filing requirements and criteria under which BIS will authorize paper submission can be found in the Federal Register, August 21, 2008.
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